What is a common con associated with taking on debt?

Taking on debt typically involves a commitment to make regular payments, which is a significant consideration for anyone financing a purchase or investment with borrowed funds. These regular payments can include principal and interest, and they need to be budgeted for in advance. This obligation may limit a borrower’s financial flexibility because they must ensure that they have sufficient income to meet these payments, which can strain finances, especially if unexpected expenses arise.

In contrast, increased investment opportunities might be perceived as a positive aspect of taking on debt, as borrowing can allow individuals or businesses to invest in higher-value assets. Higher interest rates may or may not be a factor, depending on the terms of the loan and the borrower's creditworthiness, rather than being an automatic consequence. Finally, less equity in ownership pertains more to specific types of debt structures, such as mortgages, where the borrower does not own the complete asset. However, the requirement of regular payments stands out as a common and universal con of debt, making it essential for managing personal or business finances effectively.